Toyota Motor Corp. today slashed its global sales target for 2009, a further setback to its ambition of becoming the top selling automaker worldwide after last month's lowering of its 2008 sales forecast from 9.85 million to 9.5 million vehicles. (See: Toyota to invest $700 million in Brazil; reportedly cuts global sales target)

Japan's biggest carmaker by sales volume cut its worldwide sales outlook for 2009 to 9.7 million vehicles from its previous forecast of 10.4 million vehicles. This includes sales and production at its subsidiaries - Daihatsu Motor Co and Hino Motors Ltd. These two companies' sales account for about 10 per cent of the total estimate.

The automaker will reduce production in the UK and Poland, adding to cuts in the US. Toyota lowered the target for North America, its biggest market, by 10 per cent as drivers buy fewer sport-utility vehicles and pickup trucks because of gasoline prices that have reached $4 a gallon.

Toyota has enjoyed rapid sales growth in the past five years in particular, expanding in the US and other overseas markets as increasingly cost and environmentally conscious consumers snapped up its fuel sipping, high-quality vehicles.

It narrowly missed out on unseating General Motors Corp. as the world's top auto seller last year. While it has overtaken its rival in the first six months of this year, declining momentum at home and abroad will make it harder to maintain this lead. (See: Toyota overtakes GM in first-half global sales)

Speaking at a press conference outlining its new targets, Toyota President Katsuaki Watanabe blamed the unexpected deterioration in the sector's business climate for the cuts.

"(A year ago) we couldn't have predicted the (current) economic environment and movements in crude oil and materials prices."

Watanabe said it's too early to outline the company's sales outlook for 2010 given the global economy's uncertain prospects. But he told reporters after the press conference that selling more than 10 million vehicles remains a future possibility, "as long as gasoline prices and economic conditions change."

Toyota expects its operating profit margin to fall to 6.4 per cent in the current fiscal year from the 8.6 per cent in the last fiscal year ended March as higher material costs and the yen's strength squeeze its profitability.

However, it has set itself a 10 per cent operating profit margin target as a long-term goal. "We are setting the target very high," said Watanabe.

The company aims to achieve this by boosting the profitability of small vehicles and hybrid cars, Mitsuo Kinoshita, a Toyota Executive Vice President, told reporters after the press conference.

To this end, Toyota said Monday that it would raise prices of its gasoline- electric hybrid and other models in Japan - by up to 3 per cent in most cases - starting next month, in an attempt to help absorb surging raw material prices. The price increase in Japan follow similar moves already taken this year in overseas markets. (See: Toyota hikes prices of hybrid, commercial vehicles in Japan)

Also, the company will cut one of two daily shifts at UK and Polish factories later in the year, Executive Vice President Takeshi Uchiyamada told reporters in Tokyo today. The plant in Burnaston, England, builds engines and assembles cars including the Avensis sedan and Auris hatchback. The Polish factory makes engines and transmissions.

The company is cutting production in the UK as it prepares to revamp the Avensis sedan, Uchiyamada said. It has no plan to fire workers, he added. The company will introduce 18 models that emit less pollution in Western Europe by the end of next year.

Toyota cut its 2009 North American sales forecast to 2.7 million vehicles from 3 million. In Europe, the carmaker reduced its estimate to 1.3 million units from 1.45 million. Asia excluding Japan was lowered to 1.75 million from its 1.9 million. For the domestic market, the carmaker lowered its sales projection for 2009 to 2.25 million from 2.40 million units.

Oceania, Latin America, Africa and the Middle East were the only areas where Toyota raised its goal. Sales may reach 1.7 million vehicles from an earlier figure of 1.65 million.

The US auto market has been in the doldrums since the sub-prime crisis, and what demand there is has shifted toward compact cars from pickup trucks and sport utility vehicles.

To offset the slowdown, Toyota plans to build Prius gasoline-electric hybrid cars in the US from 2010. The move will ease production constraints that have left American dealers with shortages of the car and an oversupply of big trucks. Toyota mainly builds the model in Japan at present. (See: Toyota to build the Prius in the US for the first time)

Toyota will introduce plug-in hybrids by the end of 2009, ahead of its original schedule of 2010, and will start to mass- produce electric cars in the early 2010s, Watanabe said The plug-in hybrids, the first available to fleet customers, will use normal electric sockets to recharge.